Shutterstock(SSTK) - 2025 Q1 - Quarterly Report

Financial Performance - Revenue for Q1 2025 was $242.62 million, a 13.2% increase from $214.32 million in Q1 2024[16] - Net income for Q1 2025 was $18.69 million, compared to $16.12 million in Q1 2024, representing a 15.9% increase[16] - Earnings per share (EPS) for Q1 2025 were $0.54 (basic) and $0.53 (diluted), up from $0.45 (both) in Q1 2024[16] - Total revenue for the three months ended March 31, 2025, was $242.62 million, a 13.2% increase from $214.32 million in the same period of 2024[240] - Content revenue increased to $202.9 million in Q1 2025 from $173.8 million in Q1 2024, representing a 16.7% growth[112] - Net income for the three months ended March 31, 2025, was $18.7 million, compared to $16.1 million in Q1 2024, reflecting a 16.3% increase[121] - Basic net income per share rose to $0.54 in Q1 2025 from $0.45 in Q1 2024, while diluted net income per share increased to $0.53 from $0.45[121] - Total other income for Q1 2025 was $14.5 million, significantly higher than $4.2 million in Q1 2024, driven by increased interest income and unrealized gains[113] Assets and Liabilities - Total assets increased to $1.32 billion as of March 31, 2025, compared to $1.31 billion at the end of 2024[14] - Total liabilities decreased to $777.04 million as of March 31, 2025, from $790.81 million at the end of 2024[14] - Cash and cash equivalents at the end of the period were $112.231 million, up from $71.811 million at the end of the same period last year[24] - The company had total long-lived tangible assets of $65.6 million as of March 31, 2025, slightly down from $66.4 million at the end of 2024[127] - As of March 31, 2025, the company had approximately $40.4 million in total other non-lease obligations, primarily related to minimum royalty guarantees[128] Cash Flow and Dividends - Cash dividends paid in Q1 2025 amounted to $11.50 million, compared to $10.66 million in Q1 2024[21] - The company paid cash dividends totaling $11.501 million during the three months ended March 31, 2025, compared to $10.663 million in the same period of 2024[24] - The company experienced a net increase in cash and cash equivalents of $0.980 million for the three months ended March 31, 2025, compared to a decrease of $28.679 million in the same period of 2024[24] Mergers and Acquisitions - The company plans to continue its proposed merger with Getty Images Holdings, Inc., which may impact future financial performance[10] - The company has entered into a merger agreement with Getty Images, with a cash consideration of $9.50 per share and 9.17 shares of Getty Images common stock for each share of Shutterstock common stock[33] - The Company completed the acquisition of Envato for $250.2 million on July 22, 2024, which is expected to enhance its offerings and reach faster-growing audiences[65][66] - The acquisition of Backgrid was completed for approximately $20 million on February 1, 2024, expanding Shutterstock's editorial content offerings[68][69] - The Company incurred approximately $7.0 million in transaction costs related to the Envato acquisition, included in general and administrative expenses[65] Expenses and Costs - Operating expenses for Q1 2025 totaled $232.42 million, an increase from $197.57 million in Q1 2024[16] - The company recorded a bad debt expense of $0.593 million for the three months ended March 31, 2025, compared to a recovery of $1.510 million in the same period of 2024[24] - Depreciation and amortization expense for property and equipment was $10.6 million for the three months ended March 31, 2025, compared to $10.3 million for the same period in 2024[77] - Amortization expense for the three months ended March 31, 2025, was $12.1 million, an increase from $11.0 million in the same period of 2024[84] Revenue Sources - Revenue from U.S. dollars amounted to $177.11 million, up from $153.53 million, reflecting a growth of 15.4% year-over-year[240] - Total foreign currency revenue reached $65.51 million, compared to $60.78 million, indicating an increase of 7.1%[240] - Revenue from Euro was $38.12 million, a rise of 6.8% from $35.85 million in the previous year[240] - Revenue from British pounds increased to $14.70 million, up 25.5% from $11.68 million[240] Tax and Interest - The effective tax rate for Q1 2025 was 8.5%, down from 20.9% in Q1 2024, primarily due to the net effect of discrete items[114] - The company recognized interest expense of $4.3 million for the three months ended March 31, 2025[96] - The interest rate on borrowed amounts ranges from 0.375% to 0.750% based on the company's consolidated net leverage ratio[242] Market and Economic Conditions - The company does not expect a material impact on interest expense from a hypothetical 10% change in interest rates as of March 31, 2025[242] - The company believes inflation has not materially affected its business or financial condition[243] - The company aims to preserve principal while maximizing income through its cash and cash equivalents[241] - The company may face challenges in offsetting significant inflationary pressures through price increases[243] Other Financial Metrics - Total accrued expenses decreased to $107.88 million as of March 31, 2025, from $126.64 million as of December 31, 2024[87] - The company had a remaining borrowing capacity of $94 million under its amended and restated credit agreement as of March 31, 2025[91] - As of March 31, 2025, the company had $53.8 million in unbilled receivables, with $34.4 million recorded in accounts receivable[45] - The allowance for doubtful accounts increased to approximately $3.6 million as of March 31, 2025, from $3.1 million as of December 31, 2024[46] - The identifiable intangible assets from the Envato acquisition include trademarks valued at $31.0 million and developed technology valued at $61.0 million[67]